GDP and Exports and Imports

Description: This quiz covers the concepts related to GDP, exports, and imports in the context of Indian Economics.
Number of Questions: 15
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Tags: gdp exports imports indian economy
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What is the full form of GDP?

  1. Gross Domestic Product

  2. Gross Domestic Profit

  3. Gross Domestic Price

  4. Gross Domestic Production


Correct Option: A
Explanation:

GDP stands for Gross Domestic Product, which is the total monetary value of all finished goods and services produced within a country's borders in a specific time period.

Which of the following is NOT a component of GDP?

  1. Consumption

  2. Investment

  3. Government spending

  4. Exports


Correct Option: D
Explanation:

Exports are not a component of GDP because they represent goods and services produced domestically but sold to foreign countries.

What is the relationship between GDP and exports?

  1. Exports increase GDP

  2. Exports decrease GDP

  3. Exports have no impact on GDP

  4. Exports can both increase and decrease GDP


Correct Option: A
Explanation:

Exports increase GDP because they represent additional income earned by domestic producers from foreign buyers.

What is the relationship between GDP and imports?

  1. Imports increase GDP

  2. Imports decrease GDP

  3. Imports have no impact on GDP

  4. Imports can both increase and decrease GDP


Correct Option: B
Explanation:

Imports decrease GDP because they represent goods and services purchased from foreign producers, which reduces domestic production and income.

What is the trade balance?

  1. The difference between exports and imports

  2. The difference between consumption and investment

  3. The difference between government spending and taxes

  4. The difference between GDP and net exports


Correct Option: A
Explanation:

The trade balance is the difference between the value of a country's exports and the value of its imports.

What is a trade deficit?

  1. When exports exceed imports

  2. When imports exceed exports

  3. When exports and imports are equal

  4. When GDP is negative


Correct Option: B
Explanation:

A trade deficit occurs when a country's imports exceed its exports, resulting in a negative trade balance.

What is a trade surplus?

  1. When exports exceed imports

  2. When imports exceed exports

  3. When exports and imports are equal

  4. When GDP is negative


Correct Option: A
Explanation:

A trade surplus occurs when a country's exports exceed its imports, resulting in a positive trade balance.

How do exports and imports affect a country's currency?

  1. Exports strengthen the currency, while imports weaken it

  2. Imports strengthen the currency, while exports weaken it

  3. Exports and imports have no impact on the currency

  4. Exports and imports can both strengthen or weaken the currency


Correct Option: A
Explanation:

Exports strengthen a country's currency because they increase the demand for the domestic currency, while imports weaken the currency because they increase the supply of the domestic currency.

What are the main factors that determine a country's exports and imports?

  1. Domestic production costs

  2. Foreign demand

  3. Government policies

  4. All of the above


Correct Option: D
Explanation:

A country's exports and imports are determined by a combination of domestic production costs, foreign demand, and government policies.

How can a country increase its exports?

  1. By reducing domestic production costs

  2. By increasing foreign demand

  3. By implementing export-oriented policies

  4. All of the above


Correct Option: D
Explanation:

A country can increase its exports by reducing domestic production costs, increasing foreign demand, and implementing export-oriented policies.

How can a country reduce its imports?

  1. By increasing domestic production

  2. By reducing foreign demand

  3. By implementing import-substitution policies

  4. All of the above


Correct Option: D
Explanation:

A country can reduce its imports by increasing domestic production, reducing foreign demand, and implementing import-substitution policies.

What are the potential benefits of exports for a country?

  1. Increased economic growth

  2. Job creation

  3. Improved trade balance

  4. All of the above


Correct Option: D
Explanation:

Exports can lead to increased economic growth, job creation, and an improved trade balance.

What are the potential risks of imports for a country?

  1. Increased trade deficit

  2. Loss of domestic jobs

  3. Depreciation of the currency

  4. All of the above


Correct Option: D
Explanation:

Imports can lead to an increased trade deficit, loss of domestic jobs, and depreciation of the currency.

How can a country manage its trade balance?

  1. By implementing trade policies

  2. By adjusting its exchange rate

  3. By negotiating trade agreements

  4. All of the above


Correct Option: D
Explanation:

A country can manage its trade balance by implementing trade policies, adjusting its exchange rate, and negotiating trade agreements.

What is the role of government in international trade?

  1. To promote exports

  2. To protect domestic industries

  3. To negotiate trade agreements

  4. All of the above


Correct Option: D
Explanation:

The government plays a role in international trade by promoting exports, protecting domestic industries, and negotiating trade agreements.

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